BAFINMAX-Finals-Seat-01

1. The objectives of budgeting are (1) establishing specific goals for future operations, (2) executing plans to achieve the goals, and (3) periodically comparing actual results with these goals.

• True

• False

1. Supervisor salaries, maintenance, and indirect factory wages would normally appear in the factory overhead cost budget.

• True

• False

1. When budget goals are set too tightly, the budget becomes less effective as a tool for planning and controlling operations.

• True

• False

1. Flexible budgeting requires all levels of management to start from zero and estimate sales, production, and other operating data as though operations were being started for the first time.

• True

• False

1. Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget

• True

• False

1. The first budget to be prepared is usually the cash budget.

• True

• False

1. The budgeted volume of production is based on the sum of (1) the expected sales volume and (2) the desired ending inventory, less (3) the estimated beginning inventory.

• True

• False

A formal written statement of management's plans for the future, expressed in financial terms, is a:

• gross profit report

• responsibility report

• budget

• performance report

Budgeting supports the planning process by encouraging all of the following activities except:

• requiring all organizational units to establish their goals for the upcoming period

• increasing the motivation of managers and employees by providing agreed-upon expectations

• directing and coordinating operations during the period
  

• improving overall decision making by considering all viewpoints, options, and cost reduction

  possibilities

The budget process involves doing all the following except:

• establishing specific goals

• executing plans to achieve the goals

• periodically comparing actual results with the goals

• dismissing all managers who fail to achieve operational goals specified in the budget